The Hoosier Riverboats: A Look at Rising Sun

TheHoosier
A Lookat Rising
Riverboats:
Sun
Laura
Liltlepage
Assoc
iate,
Senior Research
for UrbanPolicyand
Center
theEnvironmenL
IUPUI
and
Maureen
Flood
Coordinator of Comm
unications,
Center
forUrbanPolicyand
theEnvironment,
IUPUI
-
heRiverboat
Act,whichtookeffect
Gambling
July1,1993,
authorized
theIndiana
Gaming
to issue
Commission
licenses
fortheexpress
purpose
gambling
of riverboat
inthestateof
Indiana.
These
licenses
in
couldbegranted
thathadhelda referendum
counties
andapproved
gambling.
riverboat
Fivewereauthorized
fortheOhio
RiverandfiveforLakeMichigan.
Todate,asillustratedinTable1, ninecertificates
have
ofsuitability
beenawarded
The
andeightboatshaveopened.
is pending.
award
ofthefifth0hioRiverlicense
point
Located
insoutheast
Indiana
atthehighest
ofthe0hioRiver
between
Cincinnati
andLouisville,
0hioCounty
isthesmallest
intheHoosier
state.lts
population
in 1993was5,500;that
of itscounty
seat,
'10.77oRising
Rising
In1990,
Sun,was2,411.
of
wasbelow
thepoverty
level.
More
Sun'spopulation
thanthree-quarters
oftheworkforcetraveled
outside
thecounty
held
foremployment,
whereas
one-third
Thepercapita
was$10,786,
income
iobsoutofstate.
Manuor 82o/o
whichstoodat$13,149.
ofthestate's,
facturing
thelargest
share
of
employment
comprised
theworkforce.
0hioCounty,
andprincipally
thecityof Rising
process.
Sun,conducted
a selection
andendorsement
Themayor
andthecitycouncil
appointed
a localtask
forceoffourcitizens
which,
alongwiththeassistance
Associates,
of anoutside
consultant,
MonteDenbo
Inc.,conducted
interviews
witheachcasino
thatappliedandmaderecommendations
to thecitycouncil.
Fourapplicants
at
werereviewed,
withtworemaining
theconclusion
Thecityentered
into
of theprocess.
project
withboth.
agreements
theIndiana
0nJune30,1995,
Gaming
Commisfora Riverboat
sionissued
a Certificate
of Suitability
License
fora riverboat
to bedocked
in Rising
Owner's
Victoria
Sun.Grand
Casino
& Resort
byHyatt(formerlyRising
SunRiverboat
LLC)
Casino
& Resort,
received
itslicense
onSeptember
16,1996,and,after
gaming
twotestcruises,
commenced
full-time
opera-
lateronOctober
4.Whatlollowsisa
tionstwoweeks
firstyearof operation.
review
of Grand
Victoria's
Developmenl
Aclivities
The2,70O-passenger
riverboat
opened
with40,000
feetofgaming
space.
A 200-room
hotelwitha
square
permanent
pavilion
125,000-square{oot
and2,000
parking
spaces
opened
onJuly25,1997.
Construcgolfcourse
is slated
to begin
tionof an18-hole
this
yearpending
bytheArmyCorps
approval
of Engithatis part
neers,
anda 1,10O-seat
event
showroom
pavilion
wascompleted
lastDecember.
ofthe
Victoria
morethanthe
Grand
spent
$32million
to forthedevelopment
ofthe
agreed
$94.5million
proiect.
million
Thisincluded
anadditional$15.8
for
theboat,
forcasino
equipment,
anextra
$6.6million
million
moreforland-based
and$10.8
construction.
thatit mightincuranaddiVictoria
estimates
Grand
inconstruction
to complete
tional
costs
$16million
thedevelopment.
0lherCommitments
AsTable2 illustrates,
Victoria
isonschedule
Grand
payments.
withallof itsincentive
TheRising
Sun
hasused
the$2million
Redevelopment
Commission
for:
fromthecasino
. MainStreet
improvements,
including
newceVictorian-style
lampposts,
mentandbricksidewalks,
andstreetrepaving;
benches,
. Walnut
improvements,
including
Street
new
widening,
curbing,
drainage
systems,
street
andnew
sidewalks;
. establishment
ofa revolving
loanprogram
to
properties
helplocalresidents
develop
theirindividual
andbusinesses:
. creation
of a Downtown
Business
Retention
Program;
andRecruitment
"incubato/'
. downtown
purchased
buildings,
by
thatwillberenotheRedevelopment
Commission,
to promote
development;
vated
andresold
business
Table
1
Awarding
ofRiverboat
Gambling
Licenses
in lndiana
CiU/CounU
Company
Gary/Lake
Trumo
Indiana
lnc.
Gary/Lake
TheMajestic
StarCasino
Evansville/VanderburghMar Indiana
Gaming
Corp.
Rising
Sun/0hio
Grand
Victoria
byHyatt
Casino
& Resort
Lawrenceburg/Dearborn
Indiana
Gaming
Company,
LP/Argosy
Casino
Hammond/Lake
Empress
Casino
Hammond
Corp.
EastChicago/Lake
Marina
Partnershio
Showboat
Porte
Michigan
City/La
lndianaBlueChipHotel& Riverboat
CasinoResortCorp.
Harrison
County
Riverboat
LLC
Caesar's
Casino,
DateCertificate
of
Date0pened
SuikbilityAwarded
e1 , 1 9 9 6
December9.1994 J u n1
1 1 ,1 9 9 6
December
9,1994
June
February
10,1995
December
8.1995
4, 1996
June
30.1995
October
December
13,1996
June
30.1995
November
17.1995
June29.1996
April18,1997
January
8, 1996
April17,1996
August
22,1997
May20,1996
NOT
OPEN
2
Table
Payments
of lncentive
andDescription
Schedute
Amount
Promised
lncentive
$3,500,000
Commission
SunRedevelopment
A.Rising
$500,000
Park
B.Community
$300,000
Bureau
Visitors
&
Tourism,
Convention,
Co.
Sun/Ohio
Rising
C.
nolimit
$1peradmission,
Foundation
SunRegional
to Rising
D.Contribution
$4,000,000
advance
E.Roadimprovement
Upto $2,500,000
improvements
F.Road
upto $112,500
fees
consulting
and
financial,
for
legal,
G.Reimbursement
Reciqient
Sun
Townof Rising
Sun
Townof Rising
Sun
Townof Rising
Sun
Townof Rising
Sun
Townof Rising
sun
Townof Rising
sun
Townol Rising
Paid
Amount
through9/30/97
$2,157,296
$207,594
$300,000
$2,156,393
$689,372.
$3,000,000.$112,500
Status
Ongoing
Ongoing
Complete
Ongoing
Ongoing
ComPlete
Complete
taxrevenue
* These
sunto bercinbursedto theGrandvictoriafrcma ponion(15%)of riverboat
loanto thecW of Rising
bearing
non-interest
a non-recourse,
fundsrcpresent
t^^^ to
.^ be
^^ repaid
.^^aid through
lhr^,,dh a
, reduction
nd,6ti^n in
in admis,dm
a loan,
wiltbeconsidered
*. Grandvictoriacurrcniyis negotiating
of thisexpendrure
or not$500,000
with RisingSunasto whether
siontax.
receivedby the city tron the State.
3
Table
Granls
Foundation
SunRegional
Rising
Grant
CountY
Switzerland
District
Sewage
Regional
Florence
TownBoard
Vevay
ParkBoard
Vevay
Library
Public
County
Switzerland
Inc.
Vevay,
Historic
UnitsInc.
Emergency
County
Switzerland
Ripley
County
Townof Milan
School
Eleirentary
Sunman
Church
Catholic
of Padua
St.Anthony
Townol Versailles
of ParksandRecreation
RipleyCountyDepartment
Society
Humane
Ripley
County
Southern
YMCA
Indiana
Southeastern
Club
Lions
Milan
HighSchool
Senior
Junior
Ripley
South
Department
Police
Versailles
Amount
$75,000
$50,000
$35,875
$21,031
$2,500
$1,400
$50,000
$39,250
$23,200
$20,000
$20,000
$20,000
$15,000
$14,000
$6,425
10
$5,1
Grant
Inc.
fortheElderly,
MilanHousing
LionsClub
Osgood
County
Dearborn
Townof Dillsboro
Post464inSt'Leon
St.Joseph
Legion,
American
inAurora
Foundation
Historical
Hillforest
0hioCounty
Corp.
School
Community
County
Rising
Suni0hio
SocietY
Historical
0hioCounty
Association
Rising
SunSoccer
Counties
Multiple
Inc.
Council
& Dev't.
Conserv.
HillsResource
Hoosier
Historic
Scholarships
Educational
Inc.
Rehabilitation,
NewHorizons
Service
andCommunity
onAging
Area12Council
Inc.
Project,
Development
Rural
Indiana
Southern
Chapter
County
Dearborn/0hio
RedCross,
American
. creation
parking
areas;
of downtown
. development
DisBusiness
Walnut
Street
a
of
Center;
trictanda newCityGovernment
. riverfront
a newriverincluding
development,
Sun'sbusiVictoria
andRising
Grand
walkbetween
plaza
atthefoot
aswellasa pedestrian
nessdistrict,
of MainStreet:
. development
Center,
Medical
of a Community
and
1998;
byspring
to becompleted
. development
Assisof a SignandTechnical
thatwill
signgrants
to givebusiness
tanceProgram
district.
ofthebusiness
theappearance
improve
Victoria
Grand
admission,
casino
Forevery
SunRegional
to theRising
makes
a $1contribution
2
Amount
$2,500
$2,500
$50,000
$50,000
$10,000
$50,000
$45,413
$2,500
$38,635
$13'000
$12'981
$10'000
$8'000
$2'485
hasbeencontributed
Todate,$1,550,000
Foundation.
to encounties
andSwitzerland
Ripley,
to Dearborn,
commut0 establish
communities
ableparticipating
hasbeenset
Another
$546,295
nityfoundations.
fund.Table3 liststhe
reserve
asideasa oermanent
insouthto organizations
made
grants
thefoundation
July1997.
through
Indiana
eastern
of
one-half
share
SunandOhioCounty
Rising
generated
VicbyGrand
taxrevenue
theadmission
quarter,
and14municipalitwocounties
toria.Every
withtheforoftheproceeds,
a portion
tiesreceive
population-the
on
based
sharing
mulafor revenue
thegovernthemoremoney
greater
thepopulation,
are
counties
andSwitzerland
Ripley
mentwillreceive.
1
Figure
Rales
LocalandStateUnemployment
-
Indiana 1\---f-
Dearborn
Ripley+
ohio
---B- Switzerland
J u l AugSepOctNovDecJanFebMarAprMayJun Jul AugSep
1997
1996
partofthisplan,
municipalities:
asarethefollowing
Moores
Hill,St.Leon,
Aurora,
Dillsboro,
Greendale,
(Dearborn
Holton,
Milan,
andWestHarrison
County);
(Ripley
Napoleon,
Osgood,
Sunman,
andVersailles
(Switzerland
County).
County);
andPatriot
andVevay
Community
Activity
muchof southDuring
theflooding
thatdevastated
Victoria's
manIndiana
in March
1997,
Grand
eastern
agement
assisted
thetownsofAurora
andPatriot
during
withfloodrelief.
Although
thecasino
closed
paid200emtheperiod
of March
3-9,thecompany
ployees
to assist
infloodcleanup.
Victoria
Grand
theemergency
command
employees
alsostaffed
to
inAurora
meals
centers
andPatriot
andserved
floodvictims.
Employment
andEarnings
gaming
Initsapplication
foranIndiana
license,
Grand
people
in
Victoria
estimated
it would
1,398
employ
apthecasino
andhotel,
withannual
wages
totaling
proximately
1,1992it had
AsofOctober
$39million.
1,591
for1996-97
employees.
Salaries
andwages
(butnot
to $38million,
including
came
tipsto dealers
to barandwaitstaff).
Thiswas$1million
lessthan
theemployee
Victoria
inits
earnings
Grand
estimated
However,
theapplication
offirstapplication.
estimate
yearwages
included
which
didnotopenuntil
a hotel,
ninemonths
intothecasino's
firstyearof
July1997,
Part-time
operation.
workers
comprise
8%ofallemployees,
receive
health
andonlyfull-time
employees
carecoverage
andlifeinsurance
benefits.
gross
gamIn1996,
Victoria
Grand
hadadjusted
ingreceipts
of$135.3
million,
or23.6%
morethanits
application
estimate.
Gross
revenues
totaled
$159
million-$13.4
million
morethanthe$145.6
million
3
However,
Victoria
intheapplication.
Grand
estimated
perpassenger
pertrip.
receipts
overestimated
ranto $12.9
million,
Total
local
taxes
or$3milTotal
of$9.9million.
lionmorethantheprojection
were$23.3
million,
or$4.7million
more
state
taxes
taxes
Altogether,
totalgaming-related
thanprojected.
paidcame
million
to $36.2
199755%of Grand
Victoria's
Asof 0ctober
minorities,
werewomen,
4%comprised
employees
21%were
fromRising
Sun,and68%wereresidents
andSwitzerland
counties.
of Dearborn,
0hio,Ripley,
wasto have90%of its
Thegoalin itsapplication
localresidents,
sotherivercomprising
employees
However,
Grand
boathasfallenshortinthisrespect.
1,591
workers
outofa locallabor
Victoria
employed
withArgosy
Casino
forceof 42,292.lt
alsocompetes
foremployees.
Asof 0ctober
in nearby
Lawrenceburg
Victoria's
were
employees
30,199229%of Grand
residing
in Ohio.
withthemajority
fromoutof state,
rates
1 illustrates,
unemployment
for
AsFigure
1996,
have
decreased
since
ashas
thelocalcounties
rate.
0bviously,
theopening
thestate
unemployment
intheareahadaneffect
onunemployof riverboats
growing
economy.
However,
ment,
asdidtheregion's
ratesfor Dearunemployment
asof lastSeptember,
werestillabove
thatof
counties
bornandSwitzerland
rateforOhioCounty
fell
Theunemployment
thestate.
rateforMaythrough
August,
then
below
theIndiana
increased
to thesamelevelasthestatein Seotember.
rate
Ripley
maintained
anunemployment
County
period.
thatofthestatefortheentire
below
lmpacl
Local
Economic
to thegaming
taxespaidto thecityand
Inaddition
paid$586,127
Victoria
insales
anduse
state,
Grand
1996through
taxes
fortheperiod
October
September
it paid$32,845
in property
taxes
1997.Moreover,
period.
Payroll
thesame
of$38million
and
during
purchases
fromlocal
vendors
alsoconof$3million
tothelocaleconomy.
Thisspending
hasled
tributed
to several
newdevelopments
sincetheriverboat
including
fivenewbed-and-breakfast
estabopened,
lishments,
a newrestaurant,
anapartment
complex,
a
gasstation,
andtwonewbankbranches.
lmpact
onTourism
'1997,
Through
ofthe
September morethanone-third
Victoria
weremadebyIndiana
totalvisitsto Grand
residents,
withapproximately
one-third
ofthosevisitorsbeing
fromthelocal
area.
In1996-97,
Grand
paidadmissions,
Victoria
had3,000,000
whichis
4l%-greater
thanitsattendance
about800,000-o1
projection
intheapplication.
totheRising
Sun/0hio
County
According
ConTourism,
Bureau,
vention,
& Visitors
occupancy
at
localB&Baccommodations
andinnsincreased
be-
27
inapproximately
tween1996and1997,resulting
to
visitation
to
attributes
ThistheBureau
newrooms.
Victoria.
Grand
lmpacts
andOther
Legallssues
an
reports
Department
Sheritf's
TheohioCounty
period
of
the
during
in DWIarrests-31
increase
to
1
compared
996
September
through
1
995
October
to have
arereported
92a yearlater.Trafficaccidents
on
occurring
with60accidents
however,
decreased,
and49
opened
Victoria
Grand
56before
StateRoute
notea drop
StatePolice
Indiana
afterward.
occurring
opened;
onSR56sincethecasino
infatalaccidents
twofatal
1997,
1996andSeptember
0ctober
between
onthisroad,oneof which
occurred
trafficaccidents
employee.
Victoria
a Grand
involved
of a
fromthelocation
canresult
effects
Other
gambling
Compulsive
ina community.
riverboat
whichcouldleadto higher
a problem,
mightbecome
needforsocial
anda greater
ratesof bankruptcy
1997'
0ctober
through
1996
From0ctober
services.
problems
weremade
tencallsforhelpfromgambling
andonecallwasmade
residents,
County
byDearborn
"Deal
Withlt" line
tothe
resident
County
bya Ripley
Indiana.
Free
Drug
for
a
provided
bytheCommission
or Ripley
year,residents
of Dearborn
Intheprevious
NordidtheCommission
nocalls.
hadmade
counties
anycallsfromOhio
receive
Indiana
lora Drug-Free
in 1996or
residents
County
or Switzerland
County
1997.
0n
animpact
communities,
smaller
ln some
andotherfactors
enrollment,
school
starts,
housing
into
moving
asa resultof newemployees
is expected
however,
enrollments,
school
thearea.ln examining
County
in Dearborn
wehavefoundverylittleincrease
(.10%)
andonlyslightin(.54%)
and0hioCounty
(1.34%)
(1.61%)
andSwitzerland
in Ripley
creases
counties.
lrom0therRiverboats
ol Findings
Summary
evaluannual
1998,wehavepublished
Asof January
to
inaddition
riverboats
offourotherHoosier
ations
MaandEmpress,
Aztarin Evansville
Victoria:
Grand
jesticStar,andTrump
Table4 summarizes
in Gary.
four
ofthese
evaluation
the
first-year
of
theresults
boats.
mostof its
hasmetorexceeded
Victoria
Grand
isone
Employment
goals,
thefourothers.
ashave
met
forsevproiections
to
be
need
still
areainwhich
0verall,
Victoria'
Grand
including
eraloftheboats,
localincenfromexamining
ascanbeseen
though,
have
thelocalgovernments
tivesandtaxpayments,
presence
from
the
returns
fiscal
substantial
enioyed
oftheriverboats.
4
Table
Riverboats
of FourIndiana
Evaluation
First-Year
MajesticStar
Mar
Empress
Trump
spending
Development
($21million
$121million
morethanestimated)
($15.9
million
million
$127.9
morethanestimated)
($8.1
million
($13million $108.9
$106million
morethanest.)
million
morethanestimated)
payments
Incentive
ol schedule
Ahead
tor
except
0n schedule
lor
except
0n schedule
of hoteland
renovation
and
develoPment
commercial
substation
housing police
ofexisting
renovation
Employment
(slightlY
1,308
employees
lessthanproiected)
'1,695
(twice
the
employees
proiected)
amount
(signif.
employees
(signif. 1,073
employees
1,461
proiected)
than
more
prolected)
morethan
tips
benefits,
Wages,
$30million
$31million
million
$32.7
goals
Employment
(excePt
hiring
Metorexceeded
CountYfromVanderburgh
goal90%,
actualS0%)
goals(35%
Nospecilic
and51%from
minorities
Hammond)
for
Hasnotmetgoals
for
Hasnotmetgoals
Garyresidents,
Garyresidents,minorities,
minorities,
residents
County
residentsandLake
CountY
andLake
taxespaid
Total(stateandlocal)gaming
(wagering
andadmissions)
million
$28.2
$52.4million
$42.4million
0therlocaltaxeoPaid
0n schedule
$24.4million
$27.7million
insales
anduse
anduse $80,942
insales
in salesandusetaxes, $140,467
andusetiues, $224,704
insales
$800,000
taxes
ftues
taxes
in
property
taxes
in
$341,646
Properly
million
$2.2
andtotalrevenues Lessthanprojected
receipts
Grossgaming
thanproiected
Higher
thanproiected
Higher
Lessthanproiected